Another minister threatens to quit Israeli coalition.

The Israeli Defence Minister, Yitzhak Mordechai, has threatened to resign if Israel fails to return more West Bank land to the Palestinians.

He set a three-month deadline for the withdrawal. Mr Mordechai said he could not remain in a government which did not protect national interests.

His ultimatum follows the resignation on Sunday of another cabinet moderate, David Levy from the post of Foreign Minister.

23 members of the coalition government have also threatened to resign unless the Israeli Prime Minister, Binyamin Netanyahu, makes concessions to the Palestinians.

But Mr Netanyahu who now has just 61 seats in the 120 seat parliament is also under pressure from hard-line coalition members not to make further concessions.

Part of this commitment by Mr Netanyahu includes the continued construction of new housing at Jewish settlements in the West Bank. Mr Netanyahu's government has given the go ahead for some 600 new Jewish homes at two West Bank settlements -- about 500 at Efrat, near Bethlehem, and about one hundred at El Qana, in the north west.

Correspondents say the decision represents a defiant new blow to American peace efforts.

The United States has been demanding a freeze on all settlement expansion to break the deadlock in the peace talks. Israel says this is a natural growth of the settlements.